Britons more optimistic about housing market prospects than a year ago, survey finds

More Britons think house prices will rise than fall in the next 12 months

More Britons expect house prices to rise than fall in the next 12 twelve months, according to the latest Halifax Housing Market Confidence tracker.

Some 35% of respondents forecast that the average UK house price will rise over the next year, whilst 20% predict a decline in prices over the same period.

However, the outlook for the housing market remains subdued. The majority think that any house price change over the next 12 months will be relatively small with 66% expecting any movement to be between plus 5% and minus 5%. The average UK house price in September 2012 was 0.3% lower than in December 2011, according to the latest Halifax House Price Index.

Concerns over job security and raising a deposit continue to trouble buyers. Some 58% highlighted the challenges in raising a deposit and 51% said that concerns about job security are the main barriers to buying a home. Some 32% said household finances were a hurdle to home buying and 31% said it was the general availability of mortgages.

The north south divide regarding the outlook for national house prices over the next 12 months has widened. Those living in the South West are the most optimistic closely followed by those living in London. In contrast, those living in Scotland and the East Midland are the most pessimistic about the outlook for house prices.

Over half the respondents, 56%, think that it will be a good time to buy in the next 12 months. This is over five times the proportion of Britons that feel it will be a good time to sell at 11%. Overall, 9% were positive about both buying and selling over the next year, suggesting that the level of housing market activity is likely to remain subdued.

Men are more optimistic than women about house price prospects. Some 38% of men predict that house prices nationally will increase in the next 12 months compared with 34% of women.

The young are most optimistic over the outlook for house prices with 16 to 24 year olds and 25 to 34 year olds the most optimistic regarding house prices. In contrast, 45 to 54 year olds have the least positive outlook for house prices.

The survey also found that there has been an increase in the proportion of Britons expecting rents to rise in 2012. Some 65% of respondents forecast that the cost of private sector renting will increase over the next year. Whilst this is down from 71% of respondents in March’s survey it is up from 61% in June. And 67% of those renting in the private sector think rents will be higher in 12 months time.

‘Despite some regional differences, the general improvement in confidence in the outlook for house prices over the past year reflects the relative resilience of the UK housing market. Although the weak economic climate remains a significant constraint on housing demand, the low level of mortgage payments relative to income continues to provide support for house prices. We expect house prices to be broadly unchanged over the rest of this year and into 2013,’ said Martin Ellis, housing economist at the Halifax.